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Illuslralion by Randall Enos/lmagf Bank
30 M3,
UARKFTING mmmENJ
by Thomas S. Gruca
Defendin Service Markets Packaged-goods marketers wrote the book on defensive strategy but, for services, the translation makes all the difference.
D
uring the soaring '80s, the husiness press followed cola and PC wars with the same intensity as CNN's coverage of the Persian Gulf War. At the same time, changes in technology and regulation began to turn once-stable service markets into major theaters of conflict. Even though marketing services is different from selling soap, some of the defensive strategies perfected by product managers can be used to fend off new rivals in service markets. Many defensive lessons have been forged in the packaged-goods arena, but key differences between products and services make direct adoption of these strategies impractical. An innovative manufacturer can protect its investment in a new product through patenting (e.g.. P&G's Pert Plus shampoo. Gillette's Sensor). McDonald's can protect its recipe for burgers, but can't be sure each burger will be served exactly as intended. Because people provide tbe service, the quality may be inconsistent. Moreover, McDonald's defining competitive advantage of speedy, friendly service cannot be patented or otherwise legally protected. When Clorox announced its new combination detergent and bleach. P&G counterattacked by speeding up its own introduction of Tide with Bleach. The attacker's advantage of a potentially
superior product was quickly trumped. However, service quality is inseparable from the providers and the setting, so it's often more difficult to prevent competitive incursions. In response to the Wal-Mari challenge. Kmart decided to "renew" its older stores with new exteriors, layout, and merchandise assortments. The company expects to lay out $3.5 billion and tlve years of effort on the renovation project. Just as retailers restock their shelves from inventory, families buy packaged goods in bulk
EXECUTIVE BRIEFING
S
ervices marketers still have a lot to learn from the packaged-goods masters when it cotnes to dejlecting a competitive assault. Veterans Procter
